Nagpur: The Central government's proposal to introduce FDI in the retail sector can spell doom for both consumers and traders as it will dry up the existing supply chain with foreign investors jacking up prices, exploiting the situation to their benefit, according to a top official of a traders body.
"Consumers and traders will be at the receiving end if the UPA decides to introduce FDI in the retail sector. The international traders never face genuine competition in the market but follow a policy of concentration of goods and dominance in the market," said BC Bhartia, National president of Confederation of All India Traders (CAIT).
"These FDI investors will put lot of money and also spend huge money. Obviously their expectations will be high. They jack up prices of commodities instead of selling goods at comparative rates and virtually compel consumers to take more quantity of goods and also compromise on quality," he said.
With full control over supply chain, FDI investors will dry the existing chain (on which presently the traders are fully dependent) and exploit the situation to their benefit and thereby earning profits. Since the FDI investors have a huge capacity of financial losses bearing capacity, they will virtually make the local traders to run for money, Bhartia, a professional Chartered Accountant with a background of family business in trading, said.
To a query on states exercising options not to accept FDI, Bhartia said FDI investors are known for acquisitions and mergers.
"They will in due course take over companies having operations or market presence in mutli states. By this route, they will automatically reach the 'no entry zones' or states not interested in FDI in retail sector," he said.
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